Searching for a mortgage calculator that is accurate and easy to use? Estimate your monthly payments quickly by inputting your home price, down payment, interest rate, and loan term below.
A Mortgage Calculator
A Mortgage Calculator Formula
The standard formula used to calculate monthly mortgage payments is based on the amortization principle:
Variables
- M: Monthly Payment (Principal & Interest).
- P: Principal Loan Amount (Home Price minus Down Payment).
- i: Monthly Interest Rate (Annual Rate / 12).
- n: Total Number of Months (Years × 12).
Related Calculators
- Amortization Schedule Calculator
- Refinance Calculator
- Extra Payment Calculator
- Home Affordability Calculator
What is “A Mortgage Calculator”?
Using a mortgage calculator is the first step in understanding the financial commitment of buying a home. It takes the complexity out of loan amortization math, allowing you to instantly see how changes in your down payment, interest rate, or loan term affect your monthly budget.
This tool specifically focuses on “Principal and Interest” (P&I), which is the core of your loan payment. Remember to budget separately for property taxes, homeowners insurance, and potential HOA fees.
How to Calculate a Mortgage (Example)
Let’s walk through an example for a $300,000 home purchase:
- Home Price: $300,000.
- Down Payment: 20% ($60,000).
- Principal Loan Amount: $240,000.
- Interest Rate: 6.5% for 30 years.
- Monthly Rate: 0.065 / 12 ≈ 0.005417.
- Result: The monthly P&I payment is approximately $1,516.96.
Frequently Asked Questions (FAQ)
P&I stands for Principal (the money you borrowed) and Interest (the cost of borrowing). This is the portion of your payment that goes directly to the lender.
A 20% down payment is standard to avoid Private Mortgage Insurance (PMI). However, many first-time buyer programs allow for as little as 3% to 3.5% down.
If you choose a “Fixed-Rate Mortgage” (like a 30-year fixed), your rate stays the same for the life of the loan. If you choose an “Adjustable-Rate Mortgage” (ARM), the rate can change after an initial period.
This specific tool calculates Principal and Interest. Property taxes and insurance are additional costs that vary by location and are often paid into an escrow account along with your mortgage payment.